OeNB
Austrian home buyers benefited from more affordable loan rates in 2025 compared to the previous two years, following a one percentage point reduction by the European Central Bank (ECB). The Oesterreichische Nationalbank (OeNB) released data on Friday illustrating a significant increase in mortgage lending, though a cautious approach remains prevalent among borrowers.
“Both companies and private households saw a decrease in interest rates on modern loans in 2025,” said OeNB Vice Governor Edeltraud Stiftinger during the presentation of the new figures. The more favorable financing conditions led to a substantial rise in new mortgage agreements, totaling €17 billion in 2025, compared to €11 billion in 2024.
While still below record levels seen during periods of historically low interest rates, the data suggests the credit market downturn is now reversing. A key takeaway from the numbers is the strong preference for security among borrowers. The question of choosing between variable and fixed interest rates is being decisively answered.
Trend Toward Fixed Interest Rates
Nearly nine out of ten residential loans concluded in 2025 (86 percent) carried a fixed interest rate. Fixed-rate mortgages already dominated in 2024, indicating that the increase in loan volume is aligned with a corresponding rise in fixed-rate agreements. Prior to this, variable-rate loans held a much larger share of the market, particularly in 2021 and 2022, before a trend reversal began in 2023.
This indicates that predictability and security have turn into more important for many Austrian households than the potential for short-term interest rate advantages. The rise in interest rates beginning in 2022 significantly increased the cost of variable-rate loans. While these costs have since decreased, they remain considerably higher than previous levels, keeping borrowing costs comparatively high.
Interest payments on residential loans were notably lower in Austria in 2025 than in 2024: €3.6 billion was paid in interest, compared to €4.2 billion. Borrowers with existing variable-rate mortgages also experienced some relief, with annual interest payments per €100,000 of debt falling from €4,690 in 2024 to €3,450 in 2025.
Shifting Savings Behavior
The OeNB survey also revealed a change in savings behavior: as banks paid less interest on deposits in 2025 than in the previous year, customers deposited less additional money into savings accounts. Instead, many were willing to take on more risk, investing more money in securities.
The data presented by the OeNB also shows that housing needs have shifted since the pandemic, with strong regional differences. Property prices in rural areas have risen more sharply than in cities, potentially due to increased opportunities for remote work and a desire for more space or a home in a greener setting, according to the OeNB.
